Narrative
Full Description
Project narrative
On January 14, 2011, the Export-Import Bank of China, China Everbright Bank, and DNB NOR Bank ASA, signed a $203.343 million syndicated loan agreement with three subsidiaries of Greek shipping company Costamare Inc. — Adele Shipping Co., Bastian Shipping Co., and Cadence Shipping Co. — for the acquisition and construction cost of Hulls H1068A, H1069A, and H1070. The proceeds of the loan were to be used to partially finance the acquisition and construction cost of Hulls H1068A, H1069A, and H1070A by Adele Shipping, Bastian Shipping, and Cadence Shipping, respectively. The loan was divided into three tranches, one for each of these newbuild vessels. This loan carried a maturity of 10 years, an interest rate of LIBOR plus an unspecified margin, and a 0% default (penalty) interest rate. However, it also provided a lenders’ early repayment option in seventh year of the loan agreement. The borrowers were required to repay the loan in 40 consecutive quarterly installments, the first 39 (1-39) in the amount of $1.412 million USD per each tranche, beginning upon delivery of Hulls H1068A, H1069A, and H1070A. The final, 40th installment of repaid was to be $12.713 million USD for each tranche. Record ID#91057 captures China Eximbank's contribution to the loan, while Record ID#92463 (this project) captures China Everbright's Bank's contribution. Costamare Inc. guaranteed the obligations under the loan, up to $28,856,781 million USD. DNB NOR Bank ASA served as agent, security agent, account bank, swap provider, and co-arranger. China Eximbank served as co-arranger and issuing bank. The loan was secured by (i.e. collateralized against) assignment of refund guarantees and shipbuilding contracts, a first priority mortgage over H1068A, H1069A, and H1070A upon delivery, charter assignments, account assignments, master agreement assignment and general assignments of earnings, insurances, and requisition compensation. The Export-Import Bank of China was a Mandated Lead Arranger for this loan facility. As of December 31, 2012, Costamare had drawn down $32.199 million USD of the facility. As of February 22, 2013, $32.2 million USD was outstanding under this loan facility and there was $171.1 million USD of undrawn available credit. The borrower was expected to use the proceeds of the loan to finance 70% of the cost of a contract between Adele Shipping Co., Bastian Shipping Co., and Cadence Shipping Co. and a shipyard to construct and purchase the newbuild vessels three approximately 9,403 twenty-foot equivalent unit (TEU) vessels — H1068A, H1069A, and H1070A for a contract price of $95.08 million USD per vessels. These vessels were scheduled to be delivered between November 2013 and February 2014, with Costamare entering into 10-year charter party agreements upon their delivery at a daily rate of $43,000 USD each. The three vessels — MSC Azov (Hull H1068A), MSC Ajaccio (Hull H1069A), and MSC Amalfi (Hull H1070A) — were delivered on January 14, 2014, March 14, 2014, and April 28, 2014. The same day that each vessel was delivered, Adele Shipping Co., Bastian Shipping Co., and Cadence Shipping Co., respectively, each entered into a sale and leaseback agreement worth $85.6 million USD (for a collective amount of $256.7 million USD) with China Development Bank Financial Leasing Co., Ltd. (CDB Leasing), which purchased the vessels and then entered into a 10-year bareboat charter for each with the respective company. Adele Shipping, Bastian Shipping, and Cadence Shipping Co. used a portion of the proceeds from their respective sale and leaseback agreement to prepay the balance of the $203.343 million USD syndicated loan, refinancing it. The sale and leaseback agreement with Adele is captured by linked Record ID#91100. The sale and leaseback agreement with Bastian is captured by linked Record ID#91127. The sale and leaseback agreement with Cadence is captured by linked Record ID#91129.
Staff comments
1. The individual contributions of the three lenders to this $203.343 million USD syndicated loan are unknown. For the time being, AidData has estimated the contribution of the two Chinese state-owned banks (China Eximbank and China Everbright Bank) assuming that the three lenders contributed equal amounts ($67,781,000 USD) to the loan syndicate. 2. Costamare Inc. refers to the syndicated loan facility as the 'CEXIM—Adele credit facility.' 3. The loan agreement can be accessed in its entirety via https://www.dropbox.com/s/0tqamqybopvdgr8/FACILITY%20AGREEMENT%20for%20a%20Loan%20of%20up%20to%20US%24203%2C343%2C000%20and%20a%20Guarantee%20Facility%20of%20up%20to%20%2428%2C856%2C781%20to%20ADELE%20SHIPPING%20CO.%20BASTIAN%20SHIPPING%20CO.%20and%20CADENCE%20SHIPPING%20CO..pdf?dl=0.